While Republicans and Democrats in the United States debate whether to extend former President Bush’s tax cuts for the country’s rich, some early signs of what unwise and unfunded tax cuts can do are coming from Italy.

The country’s Court of Accounts has released its report on the finances of Italian municipalities and provinces for the period 2008-09.

The big picture is scary: Municipalities have a total debt of 62 billion euro (about $81 billion), while provinces are 11.5 billion euro (about $15 million) in debt.

“The situation in general is not encouraging,” the report states, “resulting in an increased number of [indebted] local entities, some of which find themselves in alarming situations.”

In recent years municipalities, especially the smaller ones, have had to figure out strategies on how to replenish their finances. In 2008, one of Prime Minister Silvio Berlusconi’s first government acts was abolishing I.C.I., a property tax that went directly to municipalities. The previous Prodi government had already cut I.C.I. for poorer families and homeowners.

“It’s not a big deal,” Berlusconi was reported saying in 2006, in the midst of a campaign he eventually lost to Romano Prodi. “We’re talking something between 2.3 and 2.5 billion euro, an amount we can easily recover from current tax evasion.”

That was quite an understatement.

In 2009 alone, the Italian government gave between 3.5 and 3.8 billion euro to municipalities just to cover budget gaps due to the missing I.C.I. tax. Certain cities, like Genova, went as far as writing up two separate budgets, not knowing exactly how much money they would receive from the government. Just to stay on the Genova example, in February the city’s mayor, Marta Vincenzi, said the city would finally receive from the government 20 million euro of missing I.C.I. contributions. That’s a lot of money that could go to schools, police, firefighters and other city needs.

Not being an economist, I’m having a hard time understanding the reasoning behind those backing the tax cuts. I’m glad to see I’m on the same line with Alan Greenspan and Paul Krugman on this one.

So here’s my question, both to the Italian government and Republican legislators in the United States:

Where do you find the courage to promote such irresponsible budgetary decisions that would benefit a small percentage of the rich, but hurt the vast majority of the rest of the population and the country in general?

Here is Berlusconi promising to abolish the I.C.I. tax during the 2006 campaign:

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No one is allowed to take pictures in front of the 15th century mural “The Last Supper,” by Leonardo Da Vinci… except for Prime Minister Silvio Berlusconi, who recently took Russian President Dimitri Medvedev on a sightseeing tour of Milan.
Berlusconi and Medvedev smile in front of Leonardo Da Vinci's "The Last Supper"

Most of Italy’s press is on strike today to protest a government-proposed law that would restrict the publication of investigative data such as recordings made by non-professional journalists or court documents containing wiretapped conversations.

L'espresso magazine had this banner on its website all of Friday, July 9.

History, architecture and fashion might not be enough anymore to keep Milan among the top Italian cities. What the city really needs, according to Mayor Letizia Moratti, is to get its name in the new Italian version of Monopoly coming out later this year.

“All I dealt with in these past two days was Monopoly,” the mayor of Italy’s most industrious city said at a press conference today.

Moratti has been hard at work to get the city of Milan into the revised version of Hasbro’s popular board game, which celebrates its 75th anniversary. The gaming company has asked fans to vote online for the most representative cities that will appear in the new version, replacing the old street names. The voting deadline is July 28.

“Milan is currently out of the 22 cities that would make it on the game,” said Moratti. “So I appeal to all the citizens of Milan to go to http://www.monopolyitalia.it to vote and make sure Milan will be part of the beautiful game.”

Only 0.54 percent of fans have voted Milan so far.

Milan's ranking for the future Italian version of Monopoly

Although a very poor result, the city is certainly doing better than Rome, (0.2%) Florence or Venice. (Both at 0.12%) Despite its name, even the little Pugliese town of Monopoli isn’t faring too well, stuck at a depressing 0.08%.

By shifting the focus on Monopoly, Moratti avoided answering thorny questions about slow construction and planning for Milan’s Expo 2015. Emma Marcegaglia, president of Italy’s most important group of industrials, Confindustria, said today she was “worried but still confident” the Expo would eventually come through.

Given Milan’s indecisiveness on the Expo 2015, combined with its recent housing crisis, it shouldn’t come as a surprise if Monopoly fans don’t feel confident enough to raise green houses and red hotels over Italy’s industrial capital.

Top 22 rankings for future version of Italian Monopoly

Top 22 rankings for future version of Italian Monopoly

After 17 days as Minister for the Application of the Federalist Reform, Aldo Brancher has stepped down from his government duties to take on a court trial against him and his wife.

Brancher was nominated by Prime Minister Silvio Berlusconi on June 19, after which he tried in vain to appeal to a recently approved law that gave government officials the right to delay court hearings in case of “legitimate impediment.”

“I thought I had to privilege my obligations towards the nation for a brief period of time,” Brancher told Judge Annamaria Gatto in a Milan court on Monday. “But since this decision has been widely exploited, I decided to make other choices, as a sign of respect towards my family first of all and also to put an end to the speculation.”

On June 25, just six days after his nomination, Brancher had seen his legitimate impediment request denied by President Giorgio Napolitano, who did not find any valid reason why Brancher would not be able to show up for his court hearing.
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Anyone knows that 8.6 million euro (about $10.5 million) is a helluva budget for any website. That’s how much Italy’s tourism portal has cost Italian taxpayers so far, according to public documents looked up by Il Fatto Quotidiano.

But considering how important tourism is for Italy’s economy, maybe we could cut Tourism Minister Michela Vittoria Brambilla some slack and say: “Hey, at least they’re investing the taxpayers’ money to attract more visitors to Italy.”

Wrong.

All that money has been wasted, thrown out the window (or more likely shoved down some people’s pockets).

The website I am talking about is www.italia.it: An embarrassing display of the current government’s ineptitude when it comes to innovation. You’d think they would have learned from their past mistakes.

Most sections within the site are just a few paragraphs long, with one small picture and very few links. Videos are all in Italian without subtitles, no matter what language you choose.

Oh, and the layout is pathetic.

Here are a few differences I’ve noticed after just quickly going through the tourism portals of Spain and Germany:
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A phenomenal explanation of Italy’s horrible performances during important soccer tournaments has been given by the people at czeta.it.

Basically, every time Berlusconi is in office Italy ends up losing. In 2006, when Romano Prodi was prime minister, Italy won the World Cup.

OK, it is a little biased because the authors left out Euro ’96 (eliminated in first round), the 1998 World Cup (lost to France in the quarter-finals) and Euro 2000 (lost to France in the final).

Still, it’s pretty hilarious.

Suffering is somewhat attractive… at least it’s what 64 people were looking for before clicking on my post about Italy’s embarrassing ousting from the 2010 World Cup in South Africa.

After Italy was eliminated from the World Cup by losing 3-2 to Slovakia, I went on Google Translate and looked up the word “embarrassing” in Slovak.

It’s “trápny.”

Here is what the major Italian news websites looked like right after the defeat.

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As far as I know, the Italian newspaper Il Fatto Quotidiano is a first of its kind in the journalism world.

It is the only newspaper that started thanks to a few popular blogs, that has been increasing its sales since its first edition went sold out in a few hours on September 23, 2009, and is now opening a website thanks to the newspaper’s success.

Somehow, this web-to-paper-to-web model is working. The paper-to-web model isn’t, or at least it isn’t raking in as much money as publishers would like.

So the paper based in Rome, Italy, launched their website during the wee hours of the Italian morning of June 23, and after two and a half hours had already crashed due to over 450,000 visits.

The site’s editor-in-chief, Peter Gomez, wrote in a morning post that they had predicted to reach such heights… by the next day!

The site was down for a few hours and then went live again in the early afternoon. To compensate the loss, a .pdf version of the June 23 paper edition was given away through a free download.

At first, I was surprised by the layout: It is basically the blueprint-copy of the Huffington Post, with a three-column homepage that has a main one column picture and headline at the top.

Their approach (very critical of the current Italian political scene, especially towards Prime Minister Berlusconi) is the same, and you can easily tell by the titles on their navigation bar: “Politics & The Palace;” “Justice & Impunity;” “Media & Regime.”
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